<PAGE> 1
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [ ]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec. 240.14a-11(c) or sec. 240.14a-12
OMNI U.S.A., Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(l) and
0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee
is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
- --------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
- --------------------------------------------------------------------------------
(3) Filing Party:
- --------------------------------------------------------------------------------
(4) Date Filed:
- --------------------------------------------------------------------------------
<PAGE> 2
[OMNI LETTERHEAD]
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD NOVEMBER 20, 1997
To Our Shareholders:
The Board of Directors cordially invites you to attend the 1997 Annual
Meeting of Shareholders (the "Annual Meeting") of Omni U.S.A., Inc. (the
"Company"), to be held on Thursday, November 20, 1997, at the offices of the
Company's subsidiary Butler Products Corporation, 103 South Street, Butler,
Kentucky 41006, at 10:00 a.m., Eastern Standard Time, or at such time and place
to which the Annual Meeting may be adjourned or recessed, for the following
purposes:
1. To elect four directors to the Board of Directors of the Company
to hold office until the 1998 Annual Meeting of Shareholders or until
their successors have been duly elected and qualified;
2. To ratify the appointment of Harper & Pearson Company as the
Company's independent auditors for the 1998 fiscal year; and
3. To act upon such other business as may properly come before the
Annual Meeting or any adjournments thereof.
The Board of Directors has fixed the close of business on September
26, 1997, as the record date for the determination of shareholders entitled to
receive notice of and to vote at the Annual Meeting. Therefore, the Board of
Directors sincerely hopes you can attend the meeting in person. It is important
that your shares be represented at the Annual Meeting regardless of whether you
plan to attend. Please mark, date and sign the enclosed proxy and return it
promptly in the enclosed envelope, which requires no postage if mailed in the
United States. If you are present at the meeting, and you wish to do so, you
may revoke the proxy and vote your shares in person.
By Order of the Board of Directors,
/s/ JEFFREY K. DANIEL
Jeffrey K. Daniel, President
Houston, Texas
Dated: October 1, 1997
<PAGE> 3
[OMNI LETTERHEAD]
------------------
PROXY STATEMENT
------------------
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON NOVEMBER 20, 1997
This Proxy Statement is furnished in connection with the solicitation
by the Board of Directors of Omni U.S.A., Inc., a Nevada corporation (the
"Company" or "Omni"), of the enclosed proxy (the "Proxy") to be voted at the
Company's 1997 Annual Meeting of Shareholders (the "Annual Meeting") to be held
on Thursday, November 20, 1997, at the offices of the Company's subsidiary
Butler Products Corporation, 103 South Street, Butler, Kentucky 41006, at 10:00
a.m., Eastern Standard Time, or at such time and place to which the Annual
Meeting may be adjourned or recessed, for the purposes set forth in the
accompanying Notice. This Proxy Statement and the enclosed Proxy were first
sent or given to the Company's shareholders on or about October 1, 1997.
Shares can be voted at the Annual Meeting only if the holder is
present or represented by proxy. The Proxy, if properly executed on its face
and returned, will be voted (or withheld or abstained from voting) according to
the choices specified thereon. The Proxy will be voted in favor of (i) the
election of each nominee named therein, unless a choice is indicated to
withhold authority to vote for such nominee, and (ii) each proposal described
therein unless a choice is indicated to vote against or to abstain from voting
on any specific proposal. In addition, the proxy confers discretionary in the
persons named in the proxy authorizing those persons to vote, in their
discretion, on any matters properly presented at the meeting. The presence, in
person or by proxy, of at least a majority of the outstanding shares of Common
Stock is required for a quorum. The election of directors and the approval of
any other matters will require the affirmative vote of the holders of a
majority of the shares of Common Stock entitled to vote and present in person
or by proxy at the Annual Meeting. In the case of shares that are present at
the Annual Meeting for quorum purposes, an abstention or not voting such shares
for a particular nominee for director (including by withholding authority on
the proxy) or an abstention on any other proposal will have the same affect as
a vote against such director or proposal; and a broker non-vote will have no
effect on the outcome of any proposals. Abstentions and broker non-votes are
counted for purposes of determining the presence or absence of a quorum for the
transaction of business.
GENERAL INFORMATION
Every stockholder of the Company is entitled to cast, in person or by
proxy, one vote for each share of the Company's Common Stock held by such
stockholder at the close of business on September 26, 1997, the record date for
the Annual Meeting. At that date, the Company had outstanding 3,525,092 shares
of such Common Stock.
The proxy hereby solicited is revocable at any time prior to its
exercise. The proxy may be revoked in any manner permitted by law, including,
without limitation, delivery of written notice of revocation to the
1
<PAGE> 4
Secretary of Omni, submission to the Secretary of a proxy dated later than a
previously submitted proxy, or attendance at the meeting and voting by ballot.
The cost of preparing, assembling and mailing the proxy statement and
related material will be borne by the Company. In addition to soliciting
proxies by mail, the Company may make requests for proxies by telephone,
telegraph or messenger or by personal solicitation by officers, directors, or
employees of the Company at nominal cost to the Company. The Company will
reimburse third parties for the cost of forwarding proxy material to beneficial
owners of Omni stock.
PROPOSAL 1
ELECTION OF DIRECTORS
CURRENT DIRECTORS AND NOMINEES
The Company's Articles provide for up to seven directors who serve until the
next annual meeting of the shareholders and until their successors are elected
and shall qualify. The Board of Directors has nominated and urges you to vote
for the election of the four nominees identified below who have been nominated
to serve as directors until the next annual meeting of shareholders of until
their successors are duly elected and qualified. Each of the nominees listed
below is a member of the Company's present Board of Directors. For personal
information on each nominee director, see "MANAGEMENT," below.
If, at the time of or prior to the Annual Meeting, any of the nominees
should be unable or decline to serve, the discretionary authority provided in
the proxy may be used to vote for a substitute or substitutes designed by the
Board of Directors. The Board of Directors has no reason to believe that any
substitute nominee or nominees will be required.
The following are Omni's Nominees for Board of Directors:
<TABLE>
<CAPTION>
Name Age Position Director Since
- ---- --- -------- --------------
<S> <C> <C> <C>
Jeffrey K. Daniel 36 Director, President and
Chief Executive Officer January 1988
Craig L. Daniel 37 Director and
Vice President-Manufacturing December 1993
James L. Davis 49 Director November 1996
John F. Lillicrop 62 Director November 1996
</TABLE>
The Board of Directors recommends that shareholders vote "For" the election
of each the above named nominees, and proxies executed and returned will be so
voted unless contrary instructions are indicated thereon.
BOARD OF DIRECTORS
The business and affairs of the Company are managed under the direction of
the Board of Directors (the "Board"). The Board has the responsibility for
establishing broad corporate policies and for the overall performance of the
Company, rather than day-to-day operating details. Outside members of the Board
are kept informed of the Company's business by various reports and information
provided to them throughout the year and information presented at meetings of
the Board by the Company's officers and employees.
2
<PAGE> 5
COMMITTEES OF THE BOARD OF DIRECTORS
The Board has established two standing committees: an Audit Committee and a
Compensation Committee. Actions taken by a committee of the Board are reported
to the Board of Directors at its next meeting. The Company does not have a
Nominating Committee. The following is a brief description of the committees of
the Board of Directors and their respective principal responsibilities.
The AUDIT COMMITTEE consists of two outside directors. This committee
recommends the appointment of a firm of independent certified public
accountants to audit the accounting records of the Company each year. It
reviews with representatives of the independent public accountants the auditing
arrangements and scope of the independent public accountants' examination of
the accounting records, results of those audits, their fees, and any other
problems identified by the independent public accountants regarding internal
accounting controls. The current members of the Audit Committee are Messrs.
Davis and Lillicrop. The Audit Committee met two times in fiscal year 1997.
The COMPENSATION COMMITTEE consists of two outside directors. This committee
makes recommendations to the Board of Directors as to the salaries and annual
bonuses of the elected officers, and reviews the salaries of other senior
executives. This committee makes recommendations to the Board of Directors
regarding grants of stock options to elected and other senior executive
officers and other eligible employees. The current members of the Compensation
Committee are Messrs. Davis and Lillicrop. The Compensation Committee met two
times in fiscal year 1997.
BOARD MATTERS
During the fiscal year ended June 30, 1997, the Board of Directors held
eight meetings. The Board has regularly scheduled meetings during the year and
meets at other times during the year as necessary to review significant
developments affecting the Company and to act on matters requiring Board
approval. All Board members attended all meetings of the Board of Directors and
of the committees on which such director served during the fiscal year, either
in person or by telephone.
DIRECTORS COMPENSATION
Messrs. Davis and Lillicrop are nominees as outside directors for the
Company. Each director of the Company who is not an employee of the Company or
any subsidiary is compensated through the issuance of 30,000 options to
purchase Common Stock for the initial year of service and 15,000 options to
purchase Common Stock for every year of service thereafter. The outside
directors are reimbursed for their expenses up to a maximum of $1,000 for
attendance at each board meeting. Jeffrey K. Daniel and Craig L. Daniel are not
compensated for their service as directors. During fiscal year 1997, the
Company issued to each Messrs. Davis and Lillicrop options to purchase 30,000
shares of Company Common Stock at $1.00.
None of the Directors have been a participant in any proxy contest involving
any publicly traded Company within the past ten years. Each of them has agreed
to serve as a director of the Company if elected. There are no other nominees
for director.
3
<PAGE> 6
MANAGEMENT
EXECUTIVE OFFICERS
It is anticipated after the election of directors at the Annual Meeting that
the following persons will be named Executive Officers of the Company:
<TABLE>
<CAPTION>
Name Age Position
- ---- --- --------
<S> <C> <C>
Jeffrey K. Daniel 36 President and Chief Executive Officer
Craig L. Daniel 37 Vice President-Manufacturing
Michael A. Zahorik 34 Executive Vice President, General Counsel and
Secretary
</TABLE>
- --------------------
Jeffrey K. Daniel has been an employee of Omni since 1985 and is currently the
Chief Executive Officer and President of the Company. He has a Bachelors degree
in business administration from the University of Colorado. He was Vice
President from 1987 until May 1994, when he was elected Chief Executive Officer
and President. Jeffrey K. Daniel is the brother of Craig L. Daniel. Jeffrey K.
Daniel has served as a director of the Company since January 1988 and is a
nominee for director of the Company.
Craig L. Daniel has been a full time employee of Omni since April 1989, and is
currently Vice President-Manufacturing. Craig L. Daniel is the brother of
Jeffrey K. Daniel. Craig L. Daniel has served as a director of the Company
since December 1993 and is a nominee for director of the Company.
Michael A. Zahorik joined the Company as its General Counsel in November 1994.
In June 1995, Mr. Zahorik became Vice President of the Company, and in July
1996, became Executive Vice President and Secretary of the Company. Mr. Zahorik
has a Bachelors Degree from the University of Colorado and a Juris Doctorate
from the University of Denver. Prior to his employment with the Company, Mr.
Zahorik was senior litigation and corporate counsel for McGeady Sisneros &
Wollins, P.C., in Denver, Colorado. Mr. Zahorik is admitted to practice law in
Colorado, Texas, and other Federal districts and circuits.
James L. Davis provides financial advice to mid-sized companies through
Waterford Capital, Inc., a financial services firm he has owned since 1988.
Before founding Waterford Capital, Inc., Mr. Davis was a partner at the
accounting firm of Deloitte & Touche. From September 1991 through December
1995, Mr. Davis was a director of Entourage International, Inc., a skin care
products company. Mr. Davis has a Bachelor of Business Administration degree
from Texas Tech University and is a Certified Public Accountant. Mr. Davis has
served as a director of the Company since December 1996 and is a nominee for
director of the Company.
John F. Lillicrop is President and Chief Executive Officer of OECO Corporation
("OECO"), a defense and aerospace electronics manufacturer in Portland, Oregon.
From April 1994 through March 1996, Mr. Lillicrop was Senior Vice President of
investment banking at Black and Company, Inc. in Portland, Oregon. From
December 1990 through April 1994, Mr. Lillicrop was Chairman of Springtime,
Inc. I, a wholesale grower of nursery products in Hillsboro, Oregon. Mr.
Lillicrop is a director of OECO, its subsidiary, Hibbing Electronics
Corporation, Black and Company, Inc., Tycom Corporation, and Springtime, Inc.
I. He is a graduate of the University of Colorado and received his EMBA from
the Peter Drucker Graduate Management Center of the Claremont Graduate School.
Mr. Lillicrop has served as a director of the Company since December 1996 and
is a nominee for director of the Company.
4
<PAGE> 7
COMPENSATION OF MANAGEMENT
Neither Jeffrey K. Daniel, Craig L. Daniel, nor Michael A. Zahorik are parties
to any employment contract that is not terminable at will or which entitles
them to bonuses or payments upon change of control, termination of employment
or the like.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Annual Compensation Long Term Compensation
----------------------------------- -----------------------------------
Awards Payouts
-----------------------------------
Restricted Securities
Name and Other Annual Stock Underlying LTIP All Other
Position Year Salary Bonus Compensation Awards Options/ SARs Payouts Compensation
- -------- ---- ------ ----- ------------ ------ ------------- ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Jeffrey K. Daniel
President & CEO 1995 63,665 --- --- --- --- --- ---
1996 76,500 --- --- --- 160,000* --- ---
1997 76,500 --- --- --- 136,000** --- ---
Craig L. Daniel
Vice President- 1995 76,500 --- --- --- --- --- ---
Manufacturing 1996 76,500 --- --- --- 160,000* --- ---
1997 76,500 --- --- --- 136,000** --- ---
Michael A. Zahorik
Executive Vice
President & 1995 --- --- --- --- --- --- ---
Gen. Counsel 1996 --- --- --- --- 70,000* --- ---
1997 68,500 --- --- --- 68,000** --- ---
</TABLE>
No other current executive officer's annual salary or bonus exceeded $100,000
for any of the three most recent fiscal years ended June 30, 1997.
- ---------------------------
* On January 31, 1996, under the 1996 ISOP, Jeffrey K. Daniel and Craig L.
Daniel were granted replacement options to purchase 160,000 shares of Common
Stock and Michael A. Zahorik was granted options to purchase 70,000 shares of
Common Stock. These grants were at an exercise price of $4.00 and were fully
vested. On June 6, 1997, under the 1996 ISOP, the option price on these grants
was reduced to $1.00 and the vesting schedule for these grants was changed to
vest 50% on June 6, 1998 and 50% on June 6, 1999. See "STOCK OPTION PLANS"
below.
** On June 6, 1997, under the 1996 ISOP, Jeffrey K. Daniel and Craig L. Daniel
were granted additional options to purchase 136,000 shares of Common Stock and
Michael A. Zahorik was granted additional options to purchase 68,000 shares of
Common Stock. These grants are at an exercise price of $1.00 and vest 100%
three (3) years from date of grant. See "STOCK OPTION PLANS" below.
5
<PAGE> 8
OPTION/SAR GRANTS IN LAST FISCAL YEAR
Individual Grants
<TABLE>
<CAPTION>
Number of Securities Percent of Total Options/ Exercise
Underlying Options/ SARs Granted to Employees or Base Expiration
Name SARs Granted in Fiscal Year Price Date
- ---- ------------ -------------- ----- ----
<S> <C> <C> <C> <C>
Jeffrey K. Daniel
President & CEO 136,000* 40.0% $1.00 1/31/07
Craig L. Daniel
Vice President-
Manufacturing 136,000* 40.0% $1.00 1/31/07
Michael A. Zahorik
Exec. Vice President &
General Counsel 68,000* 20.0% $1.00 1/31/07
</TABLE>
---------------------------
* On June 6, 1997, under the 1996 ISOP, Jeffrey K. Daniel and Craig L. Daniel
were granted additional options to purchase 136,000 shares of Common Stock and
Michael A. Zahorik was granted additional options to purchase 68,000 shares of
Common Stock. These grants are at an exercise price of $1.00 and vest 100%
three (3) years from date of grant. See "STOCK OPTION PLANS" below.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
Value of Unexercised
Number of Unexercised in-the-money Options/
Shares Acquired Value Options/SARs at FY-End (1) SARs at FY-End ($)(2)
Name on Exercise Realized Exercisable/Unexercisable Exercisable/Unexercisable
- ---- ----------- -------- ------------------------- -------------------------
<S> <C> <C> <C> <C>
Jeffrey K. Daniel
President & CEO NA NA 296,000 3,700
------- -----
0/296,000 -0-/3,700
Craig L. Daniel
Vice President-
Manufacturing NA NA 296,000 3,700
------- -----
0/296,000 -0-/3,700
Michael A. Zahorik
Exec. Vice President &
General Counsel NA NA 138,000 1,725
------- -----
0/138,000 -0-/1,725
</TABLE>
- -------------------
NA Not applicable; No options were exercised during the fiscal year ended June
30, 1997.
(1) Indicates number of options exercisable and unexercisable during
the fiscal year.
(2) Based upon closing price of Common Stock at June 30, 1997
of $1.125.
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<PAGE> 9
STOCK OPTION PLANS
The Company maintains a Non-Qualified Stock Option Plan (the "NQSOP")
and a 1996 Incentive Stock Option Plan (the "1996 ISOP"). The NQSOP covers
600,000 shares of Common Stock and the 1996 ISOP covers 900,000 shares of
Common Stock. The purpose of the NQSOP and 1996 ISOP is to offer eligible
employees of the Company and its subsidiaries an opportunity to acquire or
increase their proprietary interests in the Company and provide additional
incentive to contribute to its performance and growth.
On June 6, 1997, the Board, upon recommendation from the Compensation
Committee, repriced all options granted and existing to current Company
employees under the 1996 ISOP and NQSOP from $4.00 per share to $1.00 per
share. The repriced options vest 50% on June 6, 1998 and 50% June 6, 1999.
In addition, the Board, upon recommendation of the Compensation
Committee, granted options to purchase 136,000 shares of Common Stock at $1.00
per share to each Jeffrey K. Daniel and Craig L Daniel, and granted options to
purchase 68,000 shares of Common Stock at $1.00 per share to Michael A.
Zahorik, all such options to vest three years from June 6, 1997. On June 6,
1997, the Board granted options to purchase 30,000 shares of Common Stock at
$1.00 per share to each outside director James L. Davis and John F. Lillicrop.
Messrs. Davis and Lillicrop's options were immediately vested.
7
<PAGE> 10
The following table provides repricing information for options held by
any of the Company's five most highly compensated executive officers.
TEN-YEAR OPTIONS/SAR REPRICINGS
<TABLE>
<CAPTION>
Number of Length
Securities Market Exercise of Original
Underlying Price of Stock Price of Stock Option Term
Options/SARs at Time of at Time of New Remaining at
Repriced or Repricing or Repricing or Exercise Date of
Name Date Amended Amendment Amendment Price Repricing
- ---- ---- ------- --------- --------- ----- ---------
<S> <C> <C> <C> <C> <C> <C>
Jeffrey K. Daniel 6/6/97 160,000 $0.75 $4.00 $1.00 9 years
Craig L. Daniel 6/6/97 160,000 $0.75 $4.00 $1.00 9 years
Michael A. Zahorik 6/6/97 70,000 $0.75 $4.00 $1.00 9 years
</TABLE>
COMPENSATION COMMITTEE REPORT ON REPRICING OF OPTIONS
The repricing reflected in the above table was implemented on June 6, 1997
on the recommendation of the Compensation Committee in place at that time to
conform the options to prevailing market prices and provide an incentive for
which the options were designed.
OTHER COMPENSATION
The Company has paid no bonuses to its executive officers. The Company
has a group medical plan which provides medical and hospital benefits and term
life insurance to its employees, including its officers, at no cost to the
employee. Jeffrey K. Daniel and Craig L. Daniel are not compensated as
directors.
CERTAIN RELATIONSHIPS AND TRANSACTIONS
EDWARD L DANIEL AND AFFILIATES
The Company and Edward L. Daniel, former Chairman of the Board and
principal shareholder of the Company, have the following arrangements: (i)
lease of the Houston facility from Daniel Development Corporation ("DDC"), a
Washington partnership controlled by Edward L. and Joan J. Daniel in the amount
$8,000 monthly; and (ii) the Company pays Edward L. Daniel $20,000 per month,
through July 31, 1998, in consideration of terminating all previous agreements
to provide services to the Company.
From time to time, the Company has been a party to various
transactions with Edward L. Daniel ("Edward Daniel"), Joan J. Daniel ("Joan
Daniel") and certain affiliates ("Affiliates")(collectively, Edward Daniel,
Joan Daniel and Affiliates will be referred to as "Daniel"). The Company and
Daniel have had a series of disputes regarding the validity of certain
agreements between the parties. As a result of such disputes, the Company and
Daniel have entered into a Mutual Release and Settlement Agreement, effective
June 30, 1997 (the "Agreement") which supersedes and replaces all prior
negotiations, statements and agreements of the parties.
The Agreement has the effect of simplifying the Company's capital
structure, resolving outstanding contractual disputes and reducing Company
costs in the future. Under the terms of the Agreement, (1) the Company was
released from any obligation under the Equity Contract Note ("ECN") in the
principle amount of $918,304, together with accrued interest in the amount of
$222,516; (2) Edward Daniel and Joan Daniel transferred to the Company all
10,180 Series B Convertible Preferred shares held by them; (3) Edward Daniel
and Joan Daniel released the Company from any accrued dividends under the
Series B Convertible Preferred shares; (4) Edward Daniel and Joan Daniel
transferred all warrant holdings consisting of 656,101 Class A Warrants and
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<PAGE> 11
656,101 Class B Warrants held by them; and (5) the Company was released from
its obligation under previous consulting agreements which provided for the
payment of consulting fees through December 1999 in the amount of $20,000 per
month.
Upon execution of the Agreement, the Company (a) paid Edward Daniel
and Joan Daniel $35,000; (b) released a note receivable from an affiliate of
Edward Daniel, Daniel Development Corporation (the "DDC Receivable") in the
principle amount of $853,397, together with accrued interest thereon in the
amount of $208,310; (c) cancelled an account receivable in the amount of
$63,199 from LaPlante Compressor Company ("LaPlante"), an affiliate of Edward
Daniel; and (d) in exchange for the release of the ECN and the transfer of all
Preferred Stock, all of which had rights to convert into Common Stock, the
Company issued each Edward Daniel and Joan Daniel 375,000 shares of Common
Stock, which shares cannot be voted by them or their affiliates until August
1999. The Company granted Edward Daniel and Joan Daniel demand registration and
piggyback rights through 2001 subject to certain conditions and limitations set
forth in the Registration Rights Agreement executed in connection with the
Agreement. Under the Agreement, the Company will pay health care coverage for
Edward Daniel for the same period.
Pursuant to the terms of the ECN, the Company recorded accrued
interest in the aggregate amount of $73,464 in fiscal 1996 and $73,464 in
fiscal 1997, and treated all ECN interest as dividends. The Company also paid
Edward Daniel consulting fees equal to $81,598 in fiscal 1996 and $132,274 in
fiscal 1997.
The Company offset the obligation under the ECN against all Daniel
receivables, including the DDC Receivable and LaPlante Receivable. In addition,
the Company accrued in the fiscal year ended June 30, 1997, all amounts due
under the Agreement, including severance payments due Edward Daniel through
August 1998. As a result of the offset and accrual, the Company expensed
$246,317 for the fiscal year ended June 30, 1997. No amount or charges related
to the Agreement or Daniel will be recorded after June 30, 1997.
As a result of the Agreement, Edward Daniel and Joan Daniel own
1,054,136 shares of Company Common Stock (including 750,000 shares of Common
Stock delivered under the Agreement).
Subsequent to the execution of the Agreement, on or about September 6,
1997, the Company cancelled the Series A Preferred Stock, the Series B
Convertible Preferred Stock and the Series C Convertible Preferred Stock.
Lease of Real Property. The Company leases its Houston facility from
Daniel Development Corporation ("DDC"), a Washington partnership controlled by
Edward L. Daniel and Joan J. Daniel. The lease was amended pursuant to the
Agreement to provide for a five-year term at $8,000 per month; provided,
however, that the lease may be terminated by DDC upon six months notice. The
Company made aggregate lease payments to DDC of $110,000 in 1996 and $90,000 in
1997.
ESTATE OF MRS. JANE DANIEL
In November 1993, The Company borrowed $200,000 from Mrs. Jane Daniel
(now deceased), Edward Daniel's mother and a shareholder. The loan is an
unsecured note that was due November 1996. A balance of $31,145 remains on the
note as of June 30, 1997.
9
<PAGE> 12
SECURITY OWNERSHIP
CAPITALIZATION
The Company's currently authorized equity securities are as follows:
(i) 150,000,000 shares of Common Stock, par value $.004995 per share, (ii)
2,312,773 Class A Common Stock Purchase Warrants ("Class A Warrants"); and
(iii) 1,362,773 Class B Common Stock Purchase Warrants ("Class B Warrants"). As
of September 26, 1996, the Company had outstanding 3,525,092 shares of Common
Stock, and had issued Class A Warrants to purchase 946,565 shares of Common
Stock and Class B Warrants to purchase 706,372 shares of Common Stock.
On or about September 6, 1997, the Company cancelled all previously
authorized and outstanding Series A Preferred Stock, the Series B Convertible
Preferred Stock and the Series C Convertible Preferred Stock.
Class A and B Warrants. There are 946,565 Class A Warrants and 706,372
Class B Warrants to purchase Common Stock. The Class A Warrants may be
exercised by the holder thereof at any time between 90 days after issuance and
March 15, 1999, at $4.00 per share, and the Class B Warrants may be exercised
at any time between 90 days after issuance and March 15, 2001, at $6.00 per
share.
Equity Contract Notes. On or about June 30, 1997, pursuant to the
Agreement, the Company was released from any future obligation under the ECN.
10
<PAGE> 13
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the
beneficial ownership of Common Stock as of the close of business on September
26, 1997, by each person who is known to the Company to be a beneficial owner
of 5% or more of the Common Stock, by each current and Nominee director, and by
all directors and executive officers as a group.
<TABLE>
<CAPTION>
Amount and Nature
Of Beneficial
Name and Address of Beneficial Owner Ownership Percent of Class(1)
- ------------------------------------ --------- ------------------
<S> <C> <C>
Edward L. and Joan J. Daniel (3)(5) . . . . . . . . . . . . . . . . . . . . .1,054,136 29.9%
Jeffrey K. Daniel (2)(7) . . . . . . . . . . . . . . . . . 37,866 1.0%
Craig L. Daniel (2)(8) . . . . . . . . . . . . . . . . . . 48,666 1.4%
Michael A. Zahorik (2)(9) . . . . . . . . . . . . . . . . . 27,800 *
Websters Publishing, Ltd. (4) . . . . . . . . . . . . . . . . 735,018 18.3%
James L. Davis (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .80,000 2.2%
John F. Lillicrop (10) . . . . . . . . . . . . . . . . . . 35,000 1.0%
Executive Officers and
Directors as a Group . . . . . . . . . . . . . . . . . . 229,332 6.3%
</TABLE>
* less than 1% of the total number of shares outstanding
- ------------------------
(1) Based upon 3,525,092 shares of Common Stock outstanding as of
September 26, 1997.
(2) The address for all officers is 7502 Mesa Road, Houston, Texas 77028.
(3) Includes 375,000 shares of Common Stock issued to Edward Daniel
and 375,000 shares of Common Stock issued to Joan Daniel under the
Agreement which cannot be voted by them until August 1999.
(4) Includes 245,006 shares purchasable under A Warrants exercisable
within 60 days at $4.00 per share and 245,006 shares purchasable under
B Warrants exercisable within 60 days at $6.00 per share. The address
of such beneficial owner is Caroline Center, 10th Floor, 28 Yun Ping
Road, Causeway Bay, Hong Kong.
(5) The address for such beneficial owner is 2476 Bolsover, #626, Houston,
Texas 77005.
(6) Includes 50,000 shares purchasable under A Warrants exercisable within
60 days at $4.00 per share and 30,000 shares purchasable under options
exercisable within 60 days at $1.00 per share. The address of such
beneficial owner is One Park Ten Place, Suite 340, Houston, Texas
77084.
(7) Includes 3,763 shares held in street name and 770 shares held of
record by the Jeffrey K. Daniel Individual Retirement Account, a
self-directed IRA.
(8) Includes 6,800 shares held of record by the Craig L. Daniel
Individual Retirement Account, a self-directed IRA.
(9) Includes 18,300 shares held of record by the Michael A. Zahorik
Individual Retirement Account, a self-directed IRA.
(10) Includes 30,000 shares purchasable under options exercisable
within 60 days at $1.00 per share. Owned jointly with Stella J.
Lillicrop. The address of such beneficial owners is 1220 Skyland
Drive, Lake Oswego, Oregon 97034.
11
<PAGE> 14
Except as set forth above, none of the Nominees was, during the past
year, a party to any contract, arrangement or understanding with any person
with respect to any securities of Omni, including but not limited to, joint
ventures, loan or option arrangements, puts or calls, guarantees against loss
or guarantees of profit, division of losses or profits, or the giving or
withholding of proxies. For a description of certain transactions between Mr.
Edward L. Daniel and the Company, see "CERTAIN RELATIONSHIPS AND TRANSACTIONS"
above.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors and executive officers and persons who own more than ten
percent of a registered class of the Company's equity securities to file
reports with the Securities and Exchange Commission relating to transactions
and holdings in the Company Common Stock. Based solely on a review of Forms 3,
4 and 5 and amendments thereto furnished to the Company during the most recent
fiscal year, the Company is not aware of any failure to file such forms on a
timely basis.
PROPOSAL 2
RATIFICATION OF APPOINTMENT OF PRINCIPAL AUDITORS
The Board of Directors has appointed Harper & Pearson Company ("Harper &
Pearson") as the Company's independent auditors to examine the Company's
financial statements for the fiscal year ending June 30, 1998, subject to the
ratification of such selection by the shareholders at the Annual Meeting.
Harper & Pearson has acted as the Company's independent auditors since November
1993 and audited the Company's financial statements for the year ended June 30,
1997, which are included as part of the Company's Annual Report on Form 10-KSB
delivered with this Proxy Statement.
The Board of Directors recommends that the shareholders vote the
ratification of the selection of Harper & Pearson as the independent auditors
of the Company for the fiscal year ending June 30, 1998. The affirmative vote
of a majority of the shares of Common Stock present in person or by proxy is
necessary for ratification. Ratification is not required nor does it prevent
the Board from selecting different auditors; however, the Board is submitting
this matter to the shareholders in order to enhance their participation in this
aspect of the Company's affairs. If the shareholders do not ratify the
selection of Harper & Pearson as the Company's independent auditors, the Board
will reconsider the selection.
Representatives of Harper & Pearson are not expected to attend the Annual
Meeting.
12
<PAGE> 15
STOCKHOLDER PROPOSALS AND OTHER MATTERS
Shareholder proposals intended for inclusion in the proxy statement
for the next Annual Meeting must be received by the Company by March 31, 1998,
and should be sent to Michael A. Zahorik, Secretary of the Company, at the
address stated on the first page of this proxy statement.
As of the date of this proxy statement, the Board of Directors of Omni
knows of no matter, other than the election of directors, and the ratification
of the selection of independent public accountants, to come before the meeting.
If any other matter should properly come before the meeting, it is the
intention of the persons named on the accompanying form of proxy to vote such
proxy in accordance with their judgment in such matter.
By order of the Board of Directors,
/s/ JEFFREY K. DANIEL
JEFFREY K. DANIEL
President and
Chief Executive Officer
Dated: October 1, 1997
A COPY OF THE OMNI U.S.A., INC. ANNUAL REPORT TO THE SECURITIES AND EXCHANGE
COMMISSION ON FORM 10-KSB, INCLUDING THE FINANCIAL STATEMENTS AND FINANCIAL
STATEMENTS SCHEDULES, IS AVAILABLE WITHOUT CHARGE TO INTERESTED SECURITY
HOLDERS UPON WRITTEN REQUEST. THE COMPANY WILL FURNISH ANY EXHIBIT DESCRIBED IN
THE LIST ACCOMPANYING SUCH REPORT TO ANY SUCH PERSON ON REQUEST UPON PAYMENT OF
REASONABLE FEES RELATING TO THE COMPANY'S FURNISHING SUCH EXHIBITS. PLEASE
DIRECT INQUIRIES TO INVESTOR RELATIONS, OMNI U.S.A., INC., 7502 MESA ROAD,
HOUSTON, TEXAS 77028.
===============================================================================
YOUR PROXY IS IMPORTANT WHETHER YOU OWN FEW OR MANY SHARES, PLEASE SIGN AND
MAIL IT TODAY.
===============================================================================
13
<PAGE> 16
Proxy Omni USA, Inc.
7502 Mesa Road
Houston, Texas 77028
This Proxy Is Solicited By The Board Of Directors
The undersigned hereby appoints Jeffrey K. Daniel and Craig L. Daniel,
or either of them, as Proxies, each with the full power of substitution, to
vote at the Annual Meeting of Shareholders to be held on November 20, 1997, or
any adjournment thereof, all the shares of stock of Omni USA, Inc. ("Omni")
held of record by the undersigned on September 26, 1997, upon the matters
described on the reverse side of this card, all in accordance with and as more
fully described in the accompanying Notice and Proxy Statement for the Annual
Meeting. By signing and returning this Proxy, the undersigned hereby revokes
all proxies previously given with respect to the Annual Meeting.
This Proxy when properly executed will be voted in the manner directed
by the undersigned shareholder. If no direction is made on the reverse side
hereof, this Proxy will be voted FOR the Proposals described on the reverse
side hereof. In addition, this Proxy will be exercised, if either of the
Proxies named above so elects in his discretion, to vote (i) for the election
of any person to replace a nominee named above who is unable to serve or will
not serve, (ii) on any other matter as may properly come before the
shareholders at the Annual Meeting, and (iii) on matters incident to the
conduct of the Annual Meeting. As of September 26, 1997, the Proxies are not
aware of any other matters to be presented to the shareholders at the Annual
Meeting.
The Board of Directors recommends a vote FOR the Proposals set forth on the
reverse side.
<PAGE> 17
<TABLE>
<S> <C> <C> <C>
Nominees for Board of Directors [ ] For all Nominees [ ] Against all Nominees [ ] Withhold Authority
Mr. Jeffrey K. Daniel
Mr. Craig L. Daniel To vote against a particular Nominee, strike through his name; to withhold
Mr. James L. Davis authority to vote with respect to a particular Nominee, write his name in space
Mr. John F. Lilliorop below.
Ratify Harper & Pearson as Auditors [ ] For [ ] Against [ ] Abstain
Please sign this Proxy as your name appears below, date it and promply return it whether or not you plan to attend the Meeting. If
signing for a corporation or partnership or as an agent, attorney or fiduciary, indicate the capacity in which you are signing.
-------------------------------------
Signature
-------------------------------------
Capacity
Dated:
------------------------
</TABLE>
